1. What are the different steps for testing a hypothesis?

Step 1: State the Null Hypothesis

The null hypothesis can be thought of as the opposite of the "guess" the researchers made. The
null hypothesis (H0) is a statement of no effect, relationship, or difference between two or more
groups or factors. In research studies, a researcher is usually interested in disproving the null
hypothesis.
Step 2: State the Alternative Hypothesis
The alternative hypothesis (H1) is the statement that there is an effect or difference. This is
usually the hypothesis the researcher is interested in proving. The alternative hypothesis can be
one-sided or two-sided.
Step 3: Set the Significance Level (a)
The significance level (denoted by the Greek letter alpha— a) is generally set at 0.05. This
means that there is a 5% chance that you will accept your alternative hypothesis when your null
hypothesis is actually true.
Step 4: Calculate the Test Statistic and Corresponding P-Value
Hypothesis testing generally uses a test statistic that compares groups or examines associations
between variables. When describing a single sample without establishing relationships between
variables, a confidence interval is commonly used.
The p-value describes the probability of obtaining a sample statistic as or more extreme by
chance alone if your null hypothesis is true. This p-value is determined based on the result of
your test statistic. Your conclusions about the hypothesis are based on your p-value and your
significance level.
Step 5: Drawing a Conclusion
P-value <= significance level (a) => Reject your null hypothesis in favor of your alternative
hypothesis. Your result is statistically significant.
P-value > significance level (a) => Fail to reject your null hypothesis. Your result is not
statistically significant.
Hypothesis testing is not set up so that you can absolutely prove a null hypothesis. Therefore,
when you do not find evidence against the null hypothesis, you fail to reject the null hypothesis.
When you do find strong enough evidence against the null hypothesis, you reject the null
hypothesis. Your conclusions also translate into a statement about your alternative hypothesis.
When presenting the results of a hypothesis test, include the descriptive statistics in your
conclusions as well. Report exact p-values rather than a certain range.
2. How do you test the means of:
2.1. One sample mean test

where μ0 is a pre-specified value

First calculate x̅, the sample mean. Then if the standard deviation is known, use this formula:

If the standard deviation is unknown, use this formula:

2.2. Two sample mean test

H0: μ1=μ2 vs. H1: μ1 ≠ μ2

As with the one-sample t-test, the t-statistic calculated using the above formula is compared to
the critical value of t (which can be found in the t table using the df and a pre-specified level of
significance, α). Again, if the absolute value of the calculated t-statistic is larger than the
absolute value of the critical value of t, the null hypothesis is rejected.

3. How do you test the proportion of:

3.1 Any value of a population proportion

a) State the null hypothesis Ho and the alternative hypothesis Ha.
b) Calculate the test statistic:

where Po is the null hypothesized proportion i.e., when: Ho: P=Po

c) Determine the critical region.
 d) Make a decision. Determine if the test statistic falls in the critical region. If it does, reject
the null hypothesis. If it does not, do not reject the null hypothesis.
3.2. Difference between two proportions
a) Make sure the samples from each population are big enough to model differences with a
normal distribution.
b) Find the mean of the difference in sample proportions: E (p1 - p2) = P1 - P2.
c) Find the standard deviation of the difference between sample proportions
d) Find the probability.

4. How do you compute a confidence interval for a population mean when the standard
deviation is known?
For the confidence interval for a mean the formula would be:

Or written another way as:

Where X– is the sample mean. Zα is determined by the level of confidence desired by the
analyst, and σn√n is the standard deviation of the sampling distribution for means given to us by
the Central Limit Theorem.

5. How do you compute a confidence interval between population mean1 and population
mean2 when the standard deviation1 and standard deviation2 is known?

6. How do you compute the value of the difference in means of a small sample particularly:

6.1. One sample mean test

6.2. Two sample means (one sample compared to another sample mean)

6.3. Paired observations

6.4. Population mean and alpha is unknown